Fannie Mae predicts mild recession, 1st half of 2024

Economy
1

Economic & Housing Outlook

Housing Faces Mortgage Rate Headwinds as Economic Growth Likely Tempers
September 18, 2023

We maintain our forecast for a modest economic contraction in the first half of 2024. . . .

Notably the report also notes

Fundamentally, personal consumption remains at what we believe to be an unsustainable level relative to incomes,

That is a kinder gentler way of saying
“Gaius is right. Joe Biden should not be telling everyone ‘Things are great please spend spend spend.’”

People really should be reining-in their spending a little. The current path is unsustainable."

2

Of course most of their report is about homes and mortgages.

It declined to remind us that last year home sales (# of units) and mortgage originations (# of originations) hit multi-year lows recently. It instead focused on the fact that both numbers are now rising, albeit at a very slow pace.

We forecast total home sales to be around 4.8 million in 2023, which would be the slowest annual pace since 2011 and 4.9 million in 2024.

Similarly, our expectation for 2023 mortgage originations was downgraded from $1.60 trillion to $1.56 trillion in 2023 and from $1.92 trillion to $1.88 trillion in 2024.

3

yet another recession thead.

didnt have one in 2023 (the recession the world bank predicted)

we have growth.

why did the gloom and doom economists not get their way in 2023?

Allan

4

you do know that projections are for 3% growth in the just about to end 3q2023.

Allan

5

Why not?
Probably because the Fed, at the first sign of trouble, (SVB) reneged on its word, did an about face and started flooding the market with $500b newly-printed money.

Silly economists thought the fed would tell the truth.

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6

Why not…
Just in time for Trump to have to pull chestnuts out of the fire…

7

Maybe Fannie Mae has a point here.

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